Estimating International Tax Evasion by Individuals
This study provides estimates of offshore wealth held by individuals (for the world’s main economies) and corresponding estimates of international tax evasion (for the EU and EU Member States). Following the literature, the methodology relies on public statistics published by international organisations. Several additions to the standard approach are proposed including (i) estimates of offshore wealth held indirectly through shell companies, based on the identification of “Type II” international financial centres (defined as jurisdictions providing shell companies and similar devices); (ii) the use of foreign direct investment data to improve on available statistics for cross-borders deposits. Key results are as follows. The global offshore wealth is estimated at USD 7.8 trillion in 2016 (EUR 7.5 trillion) or 10.4% of global GDP, a considerable amount. This estimate is largely consistent with existing published valuations. The EU share is valued at USD 1.6 trillion (EUR 1.5 trillion), or 9.7% of GDP. The corresponding EU estimated revenue lost to international tax evasion is EUR 46 billion in 2016 (0.32% of GDP). Among Member states, there is a great deal of heterogeneity, both in monetary terms of the estimated offshore wealth (and the corresponding tax evasion) and in GDP percentages of the same.